Financial Fair Play/Financial Report (merged)

[ManCitizens.]

Re: Financial Fair Play will not affect us.

2012,manchester city fc,are more successful.and a higher profile then arsenal ,fact

City are definitely more successful than Arsenal. Not so sure about being higher profile, but Arsenal are more attractive commercially. So are Liverpool who have been shit for years. United are more attractive commercially than Arsenal and Liverpool. They probably would remain the most attractive team in the country, even if they went 8 years without a trophy or 23 years without a league title. Its just one of those things.

Commercial appeal will be governed as much by future prospects as present status. Compare these:

1) A club with a glorious history but which now sits mid-table
2) A club with a strong recent history, still top 4 or 5, but no imminent prospect of major trophies
3) A well-funded, demonstrably ambitious club that's won its first silverware for years.

Now these may (or may not) be hypothetical examples. My point is they are on different trajectories and that will affect their current/future sponsorship value dynamically. On that basis City's publicity worth gets turbo-boost relative to some of the old school.

-- Wed Jan 09, 2013 9:32 am --

Why do fools like this Arsenal fan not mention that the rags are getting 15m per season for a training shirt from DHL. Brainwashed idiots.

Why is he a fool? He was actually making some constructive points.

Which points do you consider to be constructive?

"Give us an example please. Qatar Tourism and PSG doesn't count. No disrespect to City, but if the Etihad deal is ''normal'' business, how come clubs like Barca, Madrid,Yanited or Bayern Munich never secured anything like it. Those clubs are in a different league in terms of their brand value and popularity.

If a major company gave me the task of securing shirt deals with Man Utd, Arsenal, Man City,Wigan, Bolton and Stockport, and gave me a budget of 100 million a year I'd probably offer United 45 million, Arsenal 35 million, City 15 million, Wigan 3 million,Bolton 1.5m and Stockport .5m.

That would represent fair value for the sponsor. Obviously I just made these amounts up, but nobody can argue with the basic point that different clubs have different values from a sponsorship p.o.v.

No different to placing an ad. It will cost you more to advertise in the Times than it would in your local parish newsletter. "

P1 - Well they have. Focusing on Bayern, they are part owned by Adidas; they have a kit sponsorship deal with Adidas. Should this be looked into?

P2/ 3 - It's clear to see why he isn't in control off £100m per year. Sponsorship isn't necessarily about the past. He clearly hasn't considered which of the clubs offer the most exposure for the present and the future. There is a very good chance we could become one of the biggest clubs in Europe during the next 10 years. Etihad are also striving to be one of the biggest airlines in the world. See the correlation?

P4 - I agree with that even though he's completely missing the point. Sponsoring the Premier League Champions isn’t like sponsoring a local unknown club. Using his analogy, sponsoring us is like placing an ad in The Times.

 

[Chippy_boy]

Re: Financial Fair Play will not affect us.

There is nothing to pull up over the Etihad deal as its not related party so therefore not subject to a fair value test. Why is this so hard to understand.

Is this correct though? I am not sure it is.

The term "Related Party" covers a lot of ground. For example, Etihad are a related party if "a person" at Etihad has significant influence over the reporting party. Is there anyone at Etihad who has the Sheikh's ear? There might well be.

Also Etihad is a related party if they are part of the same group. Given that we are both owned by the Abu Dhabi royal family, this is questionable as well.

I'm sure the legal eagles have the related party bit covered, but I thought there was also a ''fair market value'' clause.

Sorry, missed this question earlier.

The "fair value" requirements only apply to related party transactions. So provided whoever it is, is not defined as being related, you can charge them what you like for it.

If Bill Gates decides he wants an Executive Box at any price and is happy to give us £10m a year for it, then it's perfectly fine. The logic being that it must be market value if an unrelated party is prepared to pay it.

 

[Prestwich_Blue]

Re: Financial Fair Play will not affect us.

There is nothing to pull up over the Etihad deal as its not related party so therefore not subject to a fair value test. Why is this so hard to understand.

Is this correct though? I am not sure it is.

The term "Related Party" covers a lot of ground. For example, Etihad are a related party if "a person" at Etihad has significant influence over the reporting party. Is there anyone at Etihad who has the Sheikh's ear? There might well be.

Also Etihad is a related party if they are part of the same group. Given that we are both owned by the Abu Dhabi royal family, this is questionable as well.

I'm sure the legal eagles have the related party bit covered, but I thought there was also a ''fair market value'' clause. In other words if Anzhi Makhalachaka ended up with a sponsorship deal worth more than Bayern Munich, then something would be wrong. An unheard of club from a remote former Soviet republic can't possibly have the same value as one of the biggest clubs in the world.

Fair market value ONLY applies if there is a legally reportable related party transaction. City reported one in the last accounts, involving the sale of some Intellectual Property rights to the holding company. If that £12.8m can't be justified on the grounds of fair market value then City will have to exclude the excess from their FFP calculation.

The rules are designed to ensure that people or companies don't take advantage of their relationship to do transactions that benefit one side or the other. So if I own a company and that company buys a Ferrari for £100k then sells it to me for £100, HMRC will treat it as though the second transaction took place at full value.

 

[fbloke]

Re: Financial Fair Play will not affect us.

Wow, another FFPR thread and I didnt start it ;-)

Some of you may remember that I have been talking (positively) about FFPR for quite sometime and I must say that this forum has been one of the better places to find reasoned and balanced debate on the subject almost from day one.

In response to an early post about contacting UEFA about FFPR I actually did way back in the mists of time I called them and asked some simple but important questions.

I was provided with answers which made it clear that ANY income deemed legal within a club's host country would be allowed under the terms of FFPR.

That is a very important and specific statement as you can extrapolate from that the fact that the Etihad deal for example is perfectly acceptable to UEFA because it is signed off by City's auditors.

After my conversation with UEFA however they brought in the next stage of the loop hole closing which talked about 'fair market value' - this is to be judged by a group of UEFA experts and if they feel that a deal is above fair market value they will discount the mount above 'their' figure for FFPR purposes.

Once this fair market value test was introduced then FFPR as a threat to City and PSG etc died.

They cannot offer an opinion on fair market value that would stand up in court as the people who pay for the deals will simply stand up and say that they thought it was fair and reasonable to pay price X for sponsorship Y.

UEFA have in short tried to fix a market for sponsorships in their own image which the EU will find rather intriguing for a start.

Further to that UEFA in ignoring debt as an issue (when the whole world has debt repayment as its focus) can legitimately be accused of creating a cartel and being anti-competitive in a number of ways. The biggest one of course is that in stopping a business owner from investing his/her money in his/her own business in order to reach a level where income can be significantly increased via UEFA's own payment schedules/structures ( which are based on achievement ) could be argued is designed solely to stop any new companies from achieving the required levels of achievement.

The first question that would be asked by any crap lawyer would be which clubs benefit from FFPR most and is there any evidence of a relationship between those clubs and the people who drew up the rules that could be seen as anti-competitive?

 

[gkmcfc]

Re: Financial Fair Play will not affect us.

Does brand value really hold any huge credence in the modern globalised economy? If that was the case consumers wouldn't have turned their noses up at brands such as Rover, Woolworths, comet and so on in favour of newer more dynamic brand names.

In the era of the social network I think people really underestimate what a previously globally unknown club like City can achieve.

Clubs like Liverpool and to a degree Arsenal have rested on their laurels especially during the era of the big four (ie Utd, Arsenal, Chelsea, Liverpool).

By virtue of the fact that City are a top four club playing in the champions league and winning trophies our brand value is increasing. Our global appeal is increasing, arguably at the expense of clubs like Liverpool and Arsenal. Yes we need continued success to capitalise on this but a club like Liverpool's brand value has decreased and will continue to decrease if the longer they aren't a competitive club.

 

[Chippy_boy]

Re: Financial Fair Play will not affect us.

Does brand value really hold any huge credence in the modern globalised economy? If that was the case consumers wouldn't have turned their noses up at brands such as Rover, Woolworths, comet and so on in favour of newer more dynamic brand names.

In the era of the social network I think people really underestimate what a previously globally unknown club like City can achieve.

Clubs like Liverpool and to a degree Arsenal have rested on their laurels especially during the era of the big four (ie Utd, Arsenal, Chelsea, Liverpool).

By virtue of the fact that City are a top four club playing in the champions league and winning trophies our brand value is increasing. Our global appeal is increasing, arguably at the expense of clubs like Liverpool and Arsenal. Yes we need continued success to capitalise on this but a club like Liverpool's brand value has decreased and will continue to decrease if the longer they aren't a competitive club.

Depends on the market mate. For goods and services where there is little differentiation between suppliers, brand can be everything. Try asking Shell about the importance to them of their brand! (I know, because I have extensive business dealings with them and they get upset if you so much as put a Shell logo on a presentation you may be giving to them. They do absolutely everything to protect the value of their brand.)

Incidentally the Shell brand and logo was valued at $22bn at last count!

 

[Ladybarn Blue .]

Re: Financial Fair Play will not affect us.

I am a 100 % sure MCFC legal / accounting teams will far "better" than FIFA , utterly sure .

 

[grunge]

Re: Financial Fair Play will not affect us.

we should have top loaded the Etihad deal ( Arsenal did it with there stadium deal ) to give us the vast majoriry of it over the next 3 or 4 years while we are setting up and then either renegotiate or take the small amount left over the remaining years.

With the PSG's 150m a year deal for the next 4 years its entirely possible we could do another deal with some part Abu Dhabi ( the tourism board like PSG did ).

 

[sir baconface]

Re: Financial Fair Play will not affect us.

Which points do you consider to be constructive?

He put forward his own points for constructive debate. He was not being a fool. Simple as that.

 

[BoyBlue_1985]

Re: Financial Fair Play will not affect us.

we should have top loaded the Etihad deal ( Arsenal did it with there stadium deal ) to give us the vast majoriry of it over the next 3 or 4 years while we are setting up and then either renegotiate or take the small amount left over the remaining years.

With the PSG's 150m a year deal for the next 4 years its entirely possible we could do another deal with some part Abu Dhabi ( the tourism board like PSG did ).

What sort of company would sign a 10yr sponsorship deal front load it the first 4 years and then renegotiate after those 4 years???


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